Government action 'seldom necessary' in complex problems, says new IEA paper

• Spontaneous orders – from language to markets – emerge without central coordination and handle complexity better than government planning 

• Empirical studies show that spontaneous order outperforms coercive regulation in economic growth, natural resource management, and public service provision 

• New report challenges government intervention in climate change, public health, transport, and economic policy, arguing that complex problems require maximum freedom to solve 

A new briefing paper from the Institute of Economic Affairs argues that spontaneous order – the emergence of complex systems without central coordination – provides strong grounds for resisting Government action, especially when proposed to correct market failures or promote efficiency. 

The paper, Spontaneous Order: Analysis and Implications, published today by the Institute of Economic Affairs, examines how fundamental human institutions like language, law, morals, markets and money all emerged without deliberate centralised design. Written by Elaine Sternberg, the report argues that these spontaneously ordered systems can integrate dispersed, dynamic and tacit knowledge far more effectively than deliberately constructed orders. 

According to the paper, spontaneous orders are "self-generating, self-organising complex adaptive systems" that emerge from the unintended coordination of intentional action. They exist when a pattern emerges from multiple dispersed individual elements without any coordinator arranging that pattern. 

The paper demonstrates that spontaneous order supports individual liberty in three crucial ways:

• First, by their nature, spontaneous orders cannot be coercive, as they emerge from independent individual choices.  

• Second, their very existence proves that deliberate organisation is not the only way order can be established, undermining the basic presumption that government regulation is necessary.  

• Third, spontaneous orders require freedom to operate properly – their individual components must be free to react to changing circumstances for the system to be adaptive and self-correcting. 

The paper draws on empirical evidence and British examples to demonstrate how spontaneous order outperforms government regulation across key policy areas: 

• Natural resource management and climate change: Nobel laureate Elinor Ostrom's research proved that common-pool natural resources like pastures, fishing waters and forests are conserved better by emergent community systems than by state regulation. Her findings on polycentric governance challenge the assumption that complex environmental problems require centralised government control. 

• Transport and urban planning: A real-world British experiment on London's Exhibition Road demonstrated spontaneous order in action. When physical traffic barriers were removed from the major Kensington thoroughfare, road users were required to exercise personal care. Despite car speeds increasing by 21%, no accidents were observed during the subsequent survey. The removal of top-down control improved both safety and traffic flow. 

• Economic growth and public services: Ostrom's research extended beyond environmental issues, showing that polycentric governance proved better at providing public goods and services than centralised government, including in metropolitan police forces. Studies have confirmed spontaneous order works better than coercive regulation at generating economic growth and providing key services. 

• Technology and innovation: Advanced examples include AlphaZero's self-taught mastery of chess in just nine hours through reinforcement learning, without any programmed rules or human instruction. Similar spontaneous deep learning has been used effectively for medical breakthroughs, fraud and disease detection, and translation services. 

Sternberg argues that these findings should challenge government intervention particularly in areas where politicians claim extreme complexity requires central control. She contends that in domains like climate change, public health and economic growth, the dispersed and dynamic nature of knowledge actually makes spontaneous order superior to government planning. 

The paper concludes that recognising the potential and advantages of spontaneous order should encourage scepticism about popular public policy proposals, as government projects based on command and control cannot benefit from experience or quickly adapt and adjust in the way spontaneous orders can. 

Elaine Sternberg, author of Spontaneous Order: Analysis and Implications, said: 

"The possibility of spontaneous order should highlight large arenas where government action is unnecessary and may well be actively counterproductive. Significantly, these are areas - like climate change, public health and welfare, and economic growth - where government is most likely to claim that extreme complexity requires coercive regulation. Recognising the potential and advantages of spontaneous order should encourage scepticism about, and opposition to, such popular public proposals."

ENDS

Notes to Editors 

Read the full publication Spontaneous Order: Analysis and Implications